How Much Should You Help Your Aging Parents Financially?
While boomers save for retirement, some are also helping to support their own parents—and wrestling with some tough questions.
Violet, age 92 and still living alone in her own home, is running out of money. She took out a mortgage to meet her monthly living expenses and to support her husband, who has dementia and is in a board and care home. She is steadily eating up the equity in her home. If this keeps up, she will be homeless. Her income from a modest pension and Social Security is not enough to pay for the cost of caring for her husband and to support her. Her husband’s income is similar to hers: inadequate.
Violet sought advice about what to do. “I want to stay in my own home as long as possible” she says. Like so many seniors, she is comfortable in the place she has lived for decades and she does not want to move.
Violet has three daughters, two married and one single. None are wealthy. One of her daughters just lost her job and is looking for another position. The others are working and doing all right, but their mutual concerns about their Mom center on the question of whether they should all pitch in and help.
In a family meeting, we discussed all their concerns at some length. Even if everyone pays some money each month toward Mom’s cost of living, it still won’t be enough to keep her in the family home. As luck would have it, Violet’s daughter Joan and her husband just sold their home and were trying to decide whether to buy another home. Joan suggested that perhaps she and her husband, Tom, could move in with Mom and help pay the mortgage. I referred them to an estate planning attorney who is also a CPA, and they came up with a plan.
Mom could re-title the house and put the names of her kids on the deed. That created numerous advantages. Joan and Tom and their disabled daughter are willing to live with Mom. They will make the mortgage payments in exchange for a larger share of the remaining equity in the home. There are significant problems to work out. One is the care of their disabled daughter, who attends special school. It will be an adjustment for everyone in the household, but they are committed to make it work. The other siblings will help with Dad’s support and balance out the financial burden according to their abilities.
We put their plan in writing at the end of the family meeting and gave everyone a copy. Later, Violet called to say how happy she was that everyone seemed to be on the same page, and it felt good.
Violet’s situation is one that is showing up more frequently than ever. Our aging parents are enjoying longevity, but find themselves unable to make their money last as long as they do. Should their children help them? Most often, when their adult children can, they do.
The prospect of supporting aging loved ones raises issues of guilt, the moral of question of what is right, shock for some that their parents didn’t do better planning (or any planning), and frustration for boomers who are in the sandwich generation, still supporting their own children. All this can give rise to some monumental family conflicts.
If you find yourself looking down the road and seeing this looming issue, consider the following 10 tips for handling your aging parent support issues wisely.
1.Talk to your aging parents about their financial future. How much money is left? What does it cost to live each month? Have they considered whether to sell the home? Make plans.
2. Seek professional advice. Input from an estate planning attorney, elder law attorney, tax advisor, and financial planner can save everyone from unnecessary losses. Get advice before making decisions.
3.Be honest with yourself about your willingness to help. Old hurts, past resentments and unresolved disputes can get in the way of good planning. It may be time to work things out so that your parents’ last years can be the best quality that is available to them with existing resources.
4.Have a family meeting. If siblings, in-laws and grandchildren are involved, it’s time to see this as a family issue. Everyone’s input can be valuable in deciding what to do. If you don’t know where to start with a family meeting, enlist the help of a professional elder care advisor, elder law attorney with this expertise, or geriatric care manager.
5. Forgiveness can uplift you. If your parent was not a good parent, and is now in financial trouble, examine your own resources to give financial help. For some, it is beyond their capacity. For the rest, you can get beyond the past and do what seems like the right thing. Focus on the present, not the past.
6.Consider all the long term consequences of taking in your aging parent to your own home. Yes, it can solve many financial as well as care issues, but it is a complex matter. it works well for some and can be disastrous for others. Talk it out, establish the ground rules and involve the entire family when possible.
7. Everyone may have to make sacrifices. Many families who are on a budget find ways to work this out. It is unwise to give too much of what you need for yourself to your parent without insisting that your parent respect necessary limits too. Set the limits yourself and stick to them. If you are paying for support, it’s fair for you to make the rules.
8.Deal with reckless spending parents realistically. If their refusal to use self-discipline with money means that they will lose a home, have to go to a nursing home, or have to apply for Medicaid, it may be the consequence you can’t prevent. It does happen.
9.Work on your difficult choices with a financial advisor. If you have to use your savings, your retirement plan, or other means set aside for your own needs to help an aging parent, the long term consequences can directly affect your life a few years from now. Learn as much as you can from professionals about best strategy.
10.Don’t be afraid to say “no” to an aging parent whose demands on you seem unfair. The choices about what to do for an aging parent are very individual. No law says you have to be kind or charitable. It is a matter of conscience.
Millions of baby boomers are currently providing care and/or financial support to their aging loved ones. Some quit jobs, cut back on hours or otherwise deprive themselves of benefits, salary or retirement to help.
My personal take on this, after seeing so many adult children in my work, is that those who do help don’t regret the sacrifice. I hear reports that they are happy that they have made the choices and that after the parent passes, there is no guilt. Some relationships with aging parents are positively transformed in the process.
If you need help with a family meeting, or just general advice about this situation, feel free to call us at AgingParents.com (415)459-0413. We charge an hourly rate for our professional advice.
If financial support to aging parents is your dilemma, I encourage you to think about the matter, talk it out with your spouse, kids, and parents, and move forward. If you do help, keep an open mind and an open heart. The world is a better place because of your own generosity.